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Comment by taurath | Hacker News Reader

Okay though, if you joined Big Co now and made $400k/yr, you'd be taking home $260k post-tax. Anyone can live even in the bay area on half of that, extremely comfortably.

In 2-3 years you'd have your $300-400k for a down payment - thats 30% of a $1.2mm house. 2-3 years to buy a median priced place. Thats not bad. Also, prices in say, Santa Clara CA have gone -5.5% YoY, and are forecasted by zillow to go another -8% in the next year.

It sucks for anyone who doesn't work at BigCo right now who isn't already wealthy from the previous work.

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I honestly never understood all my peers constantly complaining about not being able to afford $2M house, as if that's what happiness is all about. You can still rent a very fancy apartment, max out your 401k, have a top car and live a great life, but just because they don't own a house they are always unhappy.

I guess it's true that money != happiness. There's always more you could have.

It might be hard to understand if you've not grown up in America, but homeownership is considered a part of adult life, of demonstrating you're seriousness and a gateway to adult life. This is sort of changing recently, but only because many millennials are straddled with student debt and jobs that won't pay enough to afford the down payment.

But every single American friend I have either has a home, or dreams of home ownership in the suburbs. And it makes sense, if I grew up in a home with a yard, I would probably want something similar for my children too. That kind of emotional connection is hard to overcome.

Yes, Home ownership is seen as the pinnacle of social status. This is stupid and people should rethink this preconceived notion.

In the bay area for example it doesn't make ANY sense to buy right now (Price to rent ratio, google it) but still people are flocking on every shitty apartment on sale. That's because they want to feel that little ego boost when they say they are "homeowners".

People will flock until they can’t and that’s when the bubble starts popping.

All the sfba homeowners who bought for cheap but are now sitting on millions of dollars of property could easily make a tidy sum if they were willing to sell for less but they will feel like they left money on the table. Ultimately when the bubble pops, everyone will sell for less but they will all think it’s perfectly rational because the “market is down”. I don’t get that perspective at all. Buy low and sell high, within reason.

So the Tax advantages and building equity are worthless and play no part in peoples desire to buy instead of rent. Ok

you should search what "opportunity cost" means. The market is highly inflated compared to other investments because people are blindly buying without thinking at almost any stupid price. Your comment is a perfect example of that.

You can leverage your money much better with a mortgage though. You just need a small down payment, but you get the upside (and downside) on the entire value of the home.

I'd also argue that most other assets are also highly inflated. The P/E on most tech stocks for instance looks a lot scarier than the overall real estate market. I'll add that people have been saying the Bay Area housing bubble will pop for over 30 years. It hasn't yet.

This is a bet on the future price of the home. And a lot of simulations have shown that you will come ahead in stocks unless you are in an exceptional growing market and not moving for at least 5 years.

There is a huge lobby in society to convince you that owning a home is the way to go (banks, real estate agent, other homeowners and people repeating this nonsense all the time). Don't let this fool you and make the calculations before buying anything.

I didn't say you could leverage it to guaranteed success, just that you can leverage a far larger amount of capital. That of course means larger risk along with the larger reward. No one is going to loan you 300k to invest in the stock market but they will to buy a house.

Ummm I dont think anybody cares about the house being $2M (or 5). If they could pay a quarter of that for a Single Family Home with N bedrooms (N being what they need for their family) and in an area they would like to be in (say closer to work/good school district etc) they would happily do so. Now if you are judging somebody because they wanted to live in house with a backyard instead of a apartment that is just passing your moral judgement onto somebody. True money may not be happiness but not having to worry about money for real estate definitely removes a lot of stress.

This is basically it for me. I don't care about how much it costs as long as I can get it. It could worth $1, I'd be fine with that. Personally, I have no interest in the financial aspect of real estate.

I want a home that I can modify to my desires and use as I please. I want a woodshop at my home or to do some small machining in my garage - can easily do it if I own the home. As it stands, my landlord gets on my case about even the smallest of changes or for even using my god damn backyard patio. (He says my furniture ruins the "cutesy aesthetic" of the exterior; the oh so visible area that no one but us can see)

It's pretty annoying and home ownership doesn't remove all the burdens/restrictions but it is better than the overbearing landlords that seem overly abundant in the bay area.

Oh man tell me about it! That but about waking one morning and changing a wall as I see fit is important for me. I don't care if I had to pay only a dollar for the place (as long as it doesn't go down in value). A house is a convinience thing for me more than a status symbol based on worth.

It's $230k after tax.

> Anyone can live even in the bay area on half of that, extremely comfortably.

You really might want to expand on "extremely comfortably". We all have very different definitions. I'd like a home with AC, good transportation, close enough to SF to actually make it up on weeknights (30-40 min drive), a retirement plan that works with the assumption I live in this area indefinitely, and a <=20 minute commute. I will not have that for $115-130k/yr net income. Just isn't available in the rental market we have. I'm not even getting into the part where I'd like to live in a nice neighborhood with good schools.

$115k/yr is $9600/mo.

You can spend $5k/mo on a rental with all of those properties, and have $4600/mo for food, utilities, bi-annual trips to europe, the payment for your porsche, and a housekeeper, all whilst saving half of your income to buy a house in the most expensive region of the US in 2-3 years.

You can literally have all of those things.

>You can spend $5k/mo on a rental

This is the key to happiness in the Bay Area, honestly. The rentals are just fine if you're willing to shell out. Sure you're not building wealth but you have plenty left over to invest, even in a kickass high-rise apartment. It's specifically a desire to own that will screw you over, no matter your compensation.

Where is this $5k/month house with AC within 40 minutes drive of SF and 20 minutes drive of work? (Menlo Park to Mountain View generally being work area) It basically limits you to San Mateo to Mountain View. I haven't seen anything for $5k/month with AC there. If you find it, let me know. I'm in the market - lol.

I have seen one show up here and there but it's almost unequivocally in a terrible neighborhood and/or near the train tracks. Both are dealbreakers. I ain't listening to trains go by at midnight or blast horns at every intersection. Lived that life - done with it.

I spent 3 minutes searching:

https://www.padmapper.com/apartments/36746960/3-bedroom-2-ba...

https://www.padmapper.com/apartments/13951431/3-bedroom-2-ba...

Point is: the trope of “nobody can live in the Bay Area on 125k net” is total bullshit, tired, and flat-out untrue. Is it harder than living on 125k elsewhere? Absolutely. Are you “poor” and unable to afford a great house? No, not at all.

There are plenty of great places.

> https://www.padmapper.com/apartments/36746960/3-bedroom-2-ba....

> https://www.padmapper.com/apartments/13951431/3-bedroom-2-ba....

These are apartments - not single family homes.

I mean, I’m not actually a realtor, but here’s a home for you:

https://www.padmapper.com/apartments/35506914/3-bedroom-2-ba...

My search space was Mountain View, so expand and you’ll find more. Point is there are plenty of options, you just have to look for them.

And, to be fair, I only searched PadMapper, which is an apartment rental website, so my results weren’t even focused on SFH.

> https://www.padmapper.com/apartments/35506914/3-bedroom-2-ba....

Doesn't have AC. Looks like a pretty depressing home - tbh. HDR'd to hell but a brick yard and a BYO washer/dryer that's literally underneath the sun and skies isn't exactly where I'd like to put my expensive appliances.

You can check Craigslist and you won't have much better results. Adding AC | Air Conditioning to your search criteria makes it narrow. Go figure - homes with it are in high demand. God forbid they say, "Air conditioning" but really mean just central air and there's no actual air conditioning. Went to more than one showing that advertised that falsity. :(

Either way, this is beyond the point. Spending over 50% of your net income on rent alone isn't a great move. Which is what you'd be doing at $115k net income.

Many people ignore more meta aspects than numbers:

Seriously, I went to a top-3-in-the-world engineering school...seriously dont I deserve something better than a shack?

Secondly, half the 40+ workers in tech I know are washed out and cant get hired, likely due to age discrimination. Tech is a lighter version of Football -- you better make the money in your 20s and 30s, because you need to live on that cash for the rest of your life. So I cant just blow ALL my post-tax income on rent, I need to save it for the post-40 slump.

Thirdly, you are constantly on the treadmill learning the new new technology. Its an uphill battle constantly for those high paying jobs.

I think your standards may be too high. That looks like a gorgeous home to me.

To be fair, I will agree with you that most places in the Bay Area don't seem to have A/C, but that's also because it's not generally needed here except for a couple weeks a year. You could do what we did in NYC all the time: window A/C's.

That is kind of depressing. My wife would swear I was joking if I told her that we could rent a house for $3,000 more than our mortgage that was less than half size and looks like something built in the 70s.

And people on HN wonder why software engineers living in other major cities in the US have no interest in going to the west coast.

Nobody wonders why. The Bay Area is clearly more expensive than anywhere else other than NYC. Nobody has ever argued that that isn't true. The salaries are also significantly higher, to compensate.

What is being argued here is whether you can live comfortably on a six figure net salary (after taxes).

That housing is expensive in the bay area does suck, no doubt, and is super annoying. But it's far worse for non-engineers. Engineers are fine, and frankly, are the ones who are driving the prices up, by virtue of being capable of and willing to pay more, as companies continue to increase compensation.

Are the salaries “significantly enough higher” that someone moving to the Bay Area could buy a 3000 square foot 5 bed/3-1/2 bath house with a large office, as soon as they move there?

The average software as a service CRUD journeymen developer could do that in many non west coast cities could do that with an FHA loan with less than $15K down with 3-5 with a salary they can make with around 5 years experience. If they are part of a married dual income couple they would be quite comfortable.

They look like they were built in the 70s because they were. That generation decided there were enough houses and promptly banned building any new ones - so we've still got the same ones.

For some reason most of them have the original gross beige carpet too.

OTOH, they do - frequently. If you can bank half your take home which is totally doable you get to move out and buy whatever home you like nearly wherever you like and retire.

Or if you are married dual income earner you can get a job anywhere else, not have to spend $5000 a month rent just to live in a small 35 year old house, live off one income and save the other.....

It’s 90 degrees plus 4 months of the year in many parts of the Bay Area, such as San Jose. So yes, you need air conditioning.

I grew up in San Jose. It's more like 2-3 weeks out of the year where air conditioning 'would be nice'

Me too. You’re right that it’s 90+ a few weeks cumulatively. Although the data is a little old.

Last year there were at least 2 weeks of 100+ degrees at my house. It’s a personal preference, over 80 I need ac. I’m sure some people like heat more. There are ~80 days a year it’s over 80 degrees.

Source: https://www.currentresults.com/Weather/California/Places/san...

Also point out the high doesn't last that long usually. Not like Phoenix where it'll be 90 degrees at 1am and you have trouble sleeping. When I lived in San Jose in August and September I'd just open the windows at night and close them in the morning. Usually the house would stay bearable though the afternoon and early evening.

I remember May and June weather as 'nice'. August and early September as 'hot'. And then October through early December as 'nice'.

If you really want AC, couldn't you buy an air conditioner? You're eliminating most places in the Bay Area with an unusual requirement like that.

I know people living in $2 million+ homes in SF without AC...

AC is completely unnecessary in most parts of SF.

San Francisco is not Silicon Valley. There is a substantial temperature difference between Mountain View and San Francisco.

Ah, so you want a single family home now.

And it has to be in San Mateo->Mtv. And it must have /CENTRAL/ AC, one would assume. I'm not going to look for houses for you, except to note there are over 100 houses available right now under $5k in that region, all of which you could install central AC into for a couple grand if you wanted. If you MUST live in the San Mateo->Mtv corridor, with all those amenities, why would you imply you're looking to move? It seems like you know what you want, and are not willing to compromise on anything. Go forth and find that perfect rental, or if you don't make enough money to get it, work harder, or re-evaluate whats actually important to you.

You can’t install central ac for $2000 and certainly not in a rental.

$4k-$5k you can, and maybe even get a break on the rent. Add an extra month to getting your 30% down payment.

Where are these numbers coming from? Adding central air to an old home without it costs way more than that even outside of the bay area.

In 40 minutes you can get so far north that there are no cellphone towers, no lights and no pavement.

In 40 minutes driving north from Mountain View I think you'll be in SF at best.

You might make it to North Bay/Marin - which is true that it's rural, but it's not because it's a secret or far from humanity or anything. It just has the fiercest NIMBYs on the planet who are fine with all their services being provided by day laborers with 2 hour commutes.

Are we talking about SF or mountain view? 40 minutes north of SF is beyond Marin. Remember that this is about living comfortably on $5,000 per month for rent. That should get a pretty incredible place anywhere north of the golden gate bridge.

Eh, twice that ($230K) after 401K, insurance, and taxes is barely over $10K a month. Not sure how you got $115K being $9600.

We were talking net, after taxes, and after saving half of the net on a $400k salary.

$115000 / 12 months === $9583.33

They're talking about net, not gross.

Do people really bitching about ~barely~ over 10k USD a MONTH? There's a lot of people living on that or barely double that, for a year. Yes, even in/near SF. Quit with the damn entitlement.

You need $8-10k/mo for mortgage and property tax payments on a median home, so yes, the "barely" part is your entire discretionary budget.

Wasn't bitching, just not understanding how one could get $9600 from $115K.

After taxes 115k is more like 5-6k a month, depending on how much you’re putting into retirement accounts, healthcare, etc.

Parent was already talking about net, after taxes.

Unless you want a 5BR SFH you can definitely have that on much less than 130k/year.

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